News (#06 June 2016)

Biznews

Mergers & Aquisitions

The European Commission approved merger of AB InBev with SABMiller

The European Commission has approved the merger of Belgian brewer Anheuser-Busch InBev (AB InBev) with its competitor SABMiller Plc on condition of the sale of almost all of SABMiller’s European assets. Such a condition was set to the company, as the European Commission fears that the merger of two brewing giants could lead to beer prices in Europe rising.

The merger of SABMiller will enable AB InBev to cover one third of the global beer market and sell double the production than Heineken, their nearest competitor. But the deal still needs to be approved by the US government and China. Australia and South Africa have already given their approval.

However, the European market leader is Heineken, and Carlsberg is second, while AB InBev and SABMiller are located on the third and fourth places in terms of sales.

The Belgian manufacturer of such brands as Budweiser, Corona and Stella Artois plans to strengthen its presence in Latin America and Africa. AB InBev is taking such a step in order to compensate for its weak global beer sales. For example, in the US, where microbrewery and cocktails are gaining popularity.

AB InBev made a formal proposal to buy SABMiller on 11 November. The value of the deal is estimated at USD 108 billion, and the revenue of the merged companies will amount to USD 64 billion, EBITDA — USD 24 billion, and market capitalization will exceed USD 260 billion.

 

Nissan buys big stake in fellow car-maker Mitsubishi for USD 2.2 billion

Carlos Ghosn, president of the Renault-Nissan alliance, has confirmed that Nissan Motor will buy 34% in Mitsubishi Motors. Mitsubishi Motors will sell this stake for USD 2.2 billion.

The Chairman and CEO of Mitsubishi Motors Osamu Masuko emphasized, in his turn, that Nissan’s successful experience of getting maximum benefits from various effective alliances.

It is assumed that the companies will expand their current partnership in mini-car development that has existed for five years.

The parties also agreed to cooperate in other areas, including productive capacities and exchanging technologies.

 

International Monitoring

Britain will oblige foreign companies to disclose their owners

The British government will oblige foreign companies that have property in the country to disclose their final owners. There are no analogues of such registers in the world. The presence of the real owner name on the list ensures that the company will operate transparently and without corruption. For example, it will no longer be possible to launder money obtained by criminal means through the firm. UK police will be able to monitor the activities of companies and activities of their respective owners. Forty UK jurisdictions have already promised that law-enforcement agencies of other countries will have access to the registry.

Every foreign company that wants to acquire property in Britain will have to enter information about its owner into a new public register.

The authorities claim that due to such measures corrupt officials will no longer be able to launder money through the buying of property. In London alone there are 44,000 objects that belong to companies from abroad. Across the whole United Kingdom there are about 100,000 foreign companies.

 

Legal business

US law firm employed a lawyer with artificial intelligence

The law firm Baker & Hostetler has hired the first lawyer that is based on artificial intelligence from IBM Company. The lawyer will work at ROSS in a team of 50 professionals involved in bankruptcy cases. ROSS Intelligence uses International Business Machine technology based on supercomputer Watson. One can ask the program questions in natural language and receive answers to them. The AI lawyer reads and understands written language, forms hypothesis, conducts research, gathers information, draws conclusions and accompanies them with legal documents.

ROSS also uses “machine learning”, which gives it the opportunity to continuously improve the results of legal information search.

Director General and co-founder of ROSS Intelligence, Andrew Arruda, said that several other companies have also signed the license to use their program, but it is not revealing who.

 

European Integration

Ukraine joined EU COSME program

Ukraine officially joined COSME, the European program to support small and medium-sized businesses.

COSME is a leading EU program, which has a budget of EUR 2.3 billion, aimed at creating favorable conditions for the development of small and medium-sized enterprises (SMEs), implemented within the framework of “Europe 2020” strategy.

COSME program supports projects with various subjects, which include facilitation of access to foreign markets, improving competitiveness conditions, culture of business conduct creation, clusters, tourism, reducing the administrative burden for companies and protecting intellectual property rights for companies operating in countries that are not members of the EU. Ukraine became the eighth country outside the EU to join the COSME program. The others are Montenegro, Macedonia, Moldova, Turkey, Albania, Serbia and Armenia.

 

Antimonopoly Committee of Ukraine

Coca-Cola Company permitted to sell fermented drinks maker Yarilo

The Antimonopoly Committee of Ukraine has issued Belizean company Nova Trade LTD a permit to acquire a stake of more than 50% in the company LLC Kvass Beverages, which is part of the Coca-Cola group of companies. Zaporozhye-based company Kvass Beverages produces kvass of live fermentation under the Yarilo TM. Coca-Cola acquired Zaporozhye factory of soft drinks, where the most famous TM was kvass Yarilo in 2009. According to the Uniform State Register of Legal Entities and Individuals, the current owner of Kvass Beverages is Irish company European Refreshments (Ireland) — a subsidiary of The Coca-Cola Company. Kvass Beverages is one of the largest kvass producers in Ukraine at present.

 

AMCU allows acquisition of 50% stake in Eurobank

The Antimonopoly Committee has allowed a citizen of the Republic of Kazakhstan, Bolat Nazarbayev, to acquire a 50% shareholding in PJSC CB Eurobank.

It should be recalled that the National Bank of Ukraine had earlier agreed to Bolat Nazarbayev acquiring a major shareholding in this bank of 50%.

According to the report, as of 20 May 2015, 50% of shares in the bank are owned by the company Finance Analit Servis, a consulting firm, whose ultimate owner is Alexander Adarich, the remaining 50% of shares are owned by Marketing Technologies, a consulting firm, LLC (the ultimate owner is Vadim Pushkarev).

Bolat Nazarbayev intends to acquire shares in the bank owned by Finance Analit Servis, a consulting firm.

As of 1 April 2016 PJSC Eurobank occupies 47th place among Ukrainian banks by size of assets (UAH 1.7 billion).

 

Transportation

Ukraine joined Trans-Caspian transport route

Ukrzaliznytsia signed the Protocol on joining Trans-Caspian international transport route by Ukraine. The project was founded in October 2013 via the creation of the Coordinating Committee for development of the Trans-Caspian international transport route.

The Trans-Caspian transport route is the international transport route China-Turkey-Europe, part of the New Silk Road from China to Western Europe, bypassing Russia. The project aims to provide a transport link between China and Europe through Kazakhstan, Azerbaijan, Georgia and Turkey.

Agreement was reached on reduction of the complex rate for transportation from USD 5,559 to USD 3,980 per one 40-foot container from Izov (Volyn Region) in Western Ukraine to the border with the People’s Republic of China (Dostyk).

It is expected that the route will not only offset losses from the transportation blockade imposed by Russia but become more economically advantageous.

The project is implemented by China Railways, JSC Kazakhstan Railways, CJSC Azerbaijan Railways, CJSC Azerbaijan Caspian Shipping Company, Baku International Sea Trade Port and Georgian Railways.

 

Investment

Chinese invested USD 75 million in Mykolayiv seaport

The Danube Shipping and Stevedoring Company, a part of COFCO Agri, a Ukrainian group of companies, a shareholder of which is the Chinese state COFCO Corporation, has unveiled a complex for the transshipment of grain and oil-producing crops in Mykolayiv, south Ukraine.

The total capacity of the new terminal is 2 million tons of products annum. The Chinese government invested USD 75 million in the project’s implementation. Construction ran for 20 months, from August 2014 to April 2016. The new terminal became one of the biggest Chinese investments in the development of Ukrainian logistic potential. 

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